Aaron Burda and I have begun work on a very interesting (and hopefully useful) project. Providing information and online links, in English, for foreign investors and businesses wishing to examine, analyze and evaluate Mexico for business operations.

We are a Creative Commons licensed project (i.e. not for profit) whose mission is to provide the best online resource to foreign businesses looking to invest in Mexico. Currently online is a very rough “mock up” of a website that we are planning to build over the next several months.

If you would like to participate in the project and feel you have some valuable expertise to contribute please apply for a userid.

Project History
The Investment Portal is a combination of two projects. Lee Iwan’s Business South of the Border Blog and Aaron Burda’s UC Davis Graduate School of Management Mexico Research Project. Both Lee and Aaron were convinced that the quality of the information available on the Internet about doing Business in Mexico could be substantially improved.

Project Future
We hope to organize the existing Internet English language resources about doing business in Mexico and add to it through having select volunteers write succinct articles on relevant business topics.

If you are a Banker, Lawyer, Accountant, Environmental Expert, HR Manager, Logistics Manager or other qualified and experienced individual with business expertise about Mexico and would like to provide information, advice, or website links to this project, don’t hesitate to contact us.

A comment from .hj highlighted an important issue when doing business in Mexico. He wrote ” (Mexicans) will try to deliver a message using indirect messages and almost never telling things directly for it is consider unpolite”

Etiquette and formal behaviour is expected in Mexican business negotiations, especially with international clients or suppliers. This will become more relaxed and informal over time, as the trust is reinforced and expectations are met on both sides.

It is all about mutual respect.

The formal rules and behaviours (etiquette) that enhance and create an atmosphere of respect have been broken down or eliminated in the USA, but in Mexico they are critical and very much a part of business dealings.

The Mexican business person does not like to create a confrontation or criticize openly, it is considered rude and ill mannered. One should be very perceptive to what is being said by your Mexican partner, what is being avoided and the implications of each behaviour.

One should avoid open criticism of the Mexican partner. They expect the same formality given to you, it is embarrassing and awkward if one begins to point fingers and rant and rave.

Make comments and observations about areas that need attention, strategies and solutions that must be adapted and challenges that must be met instead of criticism of past performance. Discuss what is working and what isn’t working, but don’t personalize it.

You may not hear direct criticism of an idea or proposal, instead there might be suggestions of alternatives.

Your ideas, proposals and solutions may be greeted by nodding heads and smiling faces, but it may only signify that the audience is listening, and not in complete agreement.

Decision-making on sensitive or unpopular issues may be delayed and not openly debated. Give your Mexican partner time to deal with these issues, and don’t force a decision in public.

If able to plan the meetings in advance, propose an agenda, and include the issues you need to discuss, or that require a decision. Give them time to prepare for the meeting and the decision-making required. Don’t demand a decision in an open meeting.

Lunches and informal settings are where the real business discussions and dialogues will take place, and even then, will be presented may be in a vague and non-confrontational manner. Use these moments to explain and explore the ideas, benefits and alternatives. Listen.

Present yourself and treat your business relationships as a well educated respectful gentleman, not like a threatening conquering warrior barbarian. Participate, listen and react to business situations with poise, calm and politeness.

The month of December is Mexico is filled with Christmas and holiday parties and social events.

The population of Mexico is 95%+ Christian and openly celebrates Christmas in private industry and government displays. Be aware that there are other religious groups in Mexico that do not celebrate Christmas in order to avoid offending suppliers or clients.

These Christmas and holiday reunions are usually mid-day dinners or late suppers. There will be get-togethers for friends, business acquaintances, associations and any committees or other groups that you might belong to.

There is also the company Christmas party.

Failure to attend the holiday events are noticed and considered rude. It’s better to arrive and steal away early than to avoid the reunions all together. Remember Mexico is a very socially oriented culture, failure to attend and participate in the social events will not help you, it might work against you.

Corporate and business gift giving is very important, and in many cases expected at Christmas time. The low end gifts range from the traditional; calendars and pens, agendas, calculators or other promotional type gifts to the higher end: fine liquors (Tequila, Scotch whiskey, Cognac, Red wine), fine food baskets, electronic equipment (Palms, IPods, etc.), gift certificates to restaurants, etc.

Unlike the USA, it is common in Mexico to give holiday gifts to the decision-makers in the purchasing department unless the companies have a policy against it.

Cut flowers or live plants are not considered an appropriate business gift.

Holiday gifts are given to important (and not so important) clients or to key people in the clients organization with whom you have a personal/business relationship (for example the secretary who answers all your calls or the logistics person who solves problems all year long).

Some transnational companies have tried to limit and reduce the amount and quality of business Christmas gifts in the past few years. It is not looked upon kindly by customers who always reflect upon the amount of money they have spent with the supplier, and believe the Christmas gift is a “thank you” and recognition of their support and loyalty throughout the year.

Work begins to slow down in Mexico at the beginning of December, and after December 12 (The Day of Guadalupe) efficiency grinds to a halt. It’s impossible to get major decisions, and many times difficult to locate business owners and managers due to events and social engagements.

Most Mexican businesses (not in tourist areas) are closed during the week between Christmas (Dec. 25) and the New Year (Jan 1). The Mexican government prohibits highway transport of certain goods and tractor trailers during this peak family vacation period.

For anyone currently doing business in Mexico, or thinking about doing business in Mexico, this is a must read.

The World Bank Group has announced that “Doing business became easier in many Mexican states in 2005-2006, according to the new Doing Business in Mexico 2007report, released today in Mexico City. The report finds that some states compare well with the best of the world, while others need much reform to become globally competitive.” – November 15, 2006

Quick results of the top ten Mexican states based upon the factors of; starting a business, registering property, obtaining credit, and enforcing a contract include:

Aguascalientes, Aguascalientes (Easiest)

Guanajuato, Celaya

Nuevo Leon, Monterrey

Sonora, Hermosillo

Campeche, Campeche

Zacatecas, Zacatecas

Queretaro, Queretaro

Michoacan, Morelia

Sinaloa, Culiacan

Mexico City (Most difficult)

A full listing of all the 31 Mexican states is available in the report.

Excerpt from the report: “If you were to open a new business in Mexico City, the start-up procedures would take 27 days on average, 8 days fewer than in Shanghai. If you decided to open a business in Guanajuato or Aguascalientes, you would have to wait 12 days—only one day longer than your competitor in Amsterdam. But if you needed to take a customer to court for a simple debt default in Guanajuato, resolving the dispute would take 304 days—far longer than the 217 days it takes in Dublin,1 but significantly shorter than in Baja California Sur where it takes 581 days. These examples illustrate two patterns. First, some Mexican states compare well with the best in the world. Second, many states need much reform to become globally competitive.”

Speeches for private industry, trade association and government events are quite common in Mexico.

Every event is started with a speech, or number of speeches from local, state or federal government officials, association presidents or high ranking members or the corresponding private industry equivalents.

Generally when a speech is given in Mexico to a group, formal protocol is followed.

For larger events a professional master of ceremonies will be hired to make the speaker introductions and keep the event moving.

Each speaker thanks and acknowledges by name and title each member sharing the stage or table of honor.

Mention of each member should be given by rank. Highest ranking official or member first, followed by the others in descending order.

Speeches in Mexico tend to be long. Government officials tend to give lots of numbers and statistics. Despite the audience’s desire to hear a short, focused discourse.

It is considered rude to take cell phone calls, carry on conversations with your neighbor, crack jokes or not pay attention during the speeches. If you can’t tolerate it, excuse yourself and leave the room.

Often invited guests and members sharing the podium do not have anything important to say, they are invited as a courtesy or as part of the political/social protocol.

After the initial speeches are over, some government officials may leave for other events.

Use these opportunities to network and exchange business cards. It is often easier to make initial contact with important figures at an event instead of via telephone calls and emails to their office.